As you may have noticed, I like to rant about the state of digital music and online stores. Well here I go again. In the 6 or so months since last writing, there has been some interesting developments, all of them for the better. Online music is now flexible, convenient and intelligent and we are seeing music delivered to us in new and exciting ways. The future is bright.

TRENDS IN ONLINE SALES

ProtectionIt would seem that the age of DRM is finally coming to a close. iTunes recently announced that they are removing protection from their entire collection. About time. It’s true that services like 7digital and AmazonMp3 have been offering this for a while, but its good to finally have the market leader on board.

FlexibilityIt’s great that iTunes is selling its music without DRM, but you are still fairly restricted when it comes to file formats. If digital music wants to make its mark, consumers should be given the same flexibility that they get when buying a CD. That means choosing your desired format and quality at the point of purchase and ideally, the ability to come back and get a different format if your needs change down the track.

In this department, 7digital is the only company that comes close. They offer a choice between WMA, AAC and MP3, but its still far from a totally flexible system. However what does impress me about 7digital is that a very limited number of albums are available as FLAC. For those who don’t know, FLAC is lossless format, allowing you to burn the tracks to a CD with the exact same quality as the original. While I may not be able tell the difference personally, this move opens up digital music to a brand new market: audiophiles. If you increase flexibility, you get a wider audience and happier customers. Hopefully we’ll see this trend improve over time.

Another area of flexibility that sees 7digital come out on top is price. Stores such as iTunes, AmazonMP3 and every other copy cat, tend to have one price for tracks, one price for albums and very little variation. In some sense this is good, ensuring that prices are always reasonable, but its also very uninspiring. Without any discounts, there's not much incentive to pick up a classic album or try your luck on an obscure release, as you might in a traditional music store. 7digital, on the other hand, may have slightly more expensive prices to begin with, but also a great range of discounted albums that can be very tempting, especially if you've lost your old copy. Price variation and sales are used in almost every area of commerce, including music stores. This is for a reason. It works!

IntegrationIt is in the field of integration that iTunes truly reigns supreme. If you use both the player and the store, buying music becomes almost as easy as listening to it. The only loser is your credit card. Other stores do a decent job. 7digital and eMusic have download managers that help keep your purchases organized and AmazonMP3 will even add your files to iTunes, but something is missing. It suggests that for online music to succeed, buying and listening need to be heavily intertwined. Perhaps more stores will adopt the iTunes model or maybe someone will figure out a way to integrate listening to your collection into a web-based environment. One way or another, I have a feeling that Songbird, a Jukebox/Browser mashup, could provide the answer for those wanting to topple iTunes.

But apparently domination isn’t enough for Apple because they went and developed Genius, further enhancing the integrated experience. Genius works by comparing your library and listening habits with millions of other iTunes users and generating intelligent recommendations based on the similarities. For the lazy and uninspired, it’s a great way to discover new music. That said, it’s nothing groundbreaking. Amazon and Last.fm have been doing it for ages. However, I can see intelligent recommendations playing an increasingly pivotal role in music purchasing, especially if someone can invent a service rewarding enough to convince people to put their money spending in the hands of an algorithm.

InnovationThe less than stellar performance of online music downloads suggests that offering plain mp3s isn’t enough to convince most buyers. More incentive is needed. Well a key way to do this is to offer mp3s in conjunction with other products. Aussie band The Grates, recently offered a deluxe package of their new album which included a ticket to your local gig when they did their album tour. The savings were enough to convince a teetering fan to take up the offer. However, combining ticket sales with mp3s is also not new. Even iTunes had a go, without much success. But whatever its past record, I think its definitely an avenue worth pursuing. Imagine this scenario: we have a band who are wildly popular thanks to word of mouth and an album that rapidly spread across illegal download networks. As a result of their popularity, their gigs are selling out as soon as they go on sale. Let's say MGMT for example. If they were to offer a deal that gave album purchasers the ability to buy tickets before the general public, I dare say many illegal downloaders would be tempted to pay for the album in order to guarantee their spot. Of course this would also work for either physical or digital album sales, but the online nature of digital music makes pulling this off more of a possibility.

Digital music also makes it very easy for artists to tie in bonus content. Rather than sticking extras on the end of a CD, purchasing an online album can open exclusive access to online areas, containing bonus videos, live recordings etc. Metallica did just this with their latest album and it worked a treat. It’s a small effort for artists, but a big benefit for listeners. By differentiating legal and illegal downloads, you give listeners the incentive to actually pay for their music. All that’s required now is a online music store that makes it easy for artists to offer this sort of content.

DELIVERY OF DIGITAL MUSIC

It’s good to know that someone out there is trying. Trying to shake things up. The past year has seen three new services launch, each claiming to revolutionize the way we will buy digital music. Sadly, I can’t see any of them achieving this, but that doesn’t detract from their merits. Like the subscription model, these services will have both fans and critics, but importantly, will add to the choices of how we want to buy music.

Nokia – ‘Comes with Music’ The premise is as such: you buy a phone and in return, get free access to Nokia’s vast online music collection. It sounds too good to be true and it is. For one, it isn’t really free. These phones will cost more than they otherwise would have. Secondly, it only lasts for 12 months, after which you’ll either have to pay for more or get a new phone. And finally, it really isn’t a replacement for buying music, because there’s limits on what you can do with the music. But I really must congratulate Nokia for going out on a limb and trying this. It may not change the industry, but for those who get it on their phone, it’s a pretty cool bonus feature.

DDA MusicThis one really had me intrigued. Albums come in a little package, with art and liner notes, just like a normal CD, except that in this case, the music is on a USB stick. Now to me, putting music on USB drives is a stupid idea, but what grabs me about this product is the attention given to extra content. This is something I always felt was lacking from digital music. With a CD you get something physical, something attractive to show for your purchase. DDA tries to replicate this. It also offers plenty of possibilities in the way of digital content, with the ability for artists to offer bonus materials such as videos and live tracks. They can even continue to offer rewards, long after a purchase has been made, targeting fans who were loyal. I wish I could have have tried one of these out, but sadly the launch was appalling. None of the ‘participating’ retailers had even heard of them, and still, more than a month later, I’ve only ever spotted one of them in a store.

Slot MusicThis format is similar to DDA music except that the music comes on a tiny MicroSD card. It offers similar sorts of bonus content, such as videos and remixes, but lacks the online connectivity of DDA. Even though MicroSD cards would we be incredibly easy to lose and wouldn’t make a very pretty collection, the are probably the smarter option. I’ll always remember the disappointment after I first upgraded from CD player to Mp3 player, of not being able to enjoy my brand new purchases on the bus trip home. Well with Slot Music, the millions of people with MicroSD compatible phones will be able to get their instant gratification.

While both Slot Music and DDA have their merits, I think they’re missing the point. It takes a huge improvement for a new format to take off. With cassettes, it was portability. With CDs, it was storage space and digital capacity. These new formats merely offer minor enhancements, and as such, won’t be enough to cause a major shift in consumer habits. The reason digital music has so much potential is because it has the ability to go BEYOND physical formats. This is where we should be focussing attention.

THE FUTURE

InterfacesNothing frustrates me more than the fact that I’m not the head of an electronics company with money to burn. There’s one product in particular that baffles me when I wonder why someone hasn’t invented it yet. It consists of a hard drive and touch screen the size of a photo frame. It sits on your shelf and can either use its own speakers or connect to your existing system. It plays music off the hard drive or off computers on your home network and you interact with it using an iTunes/iPhone interface on the touch screen. It also connects to an online music store, allowing you to download new music directly to the device. In other words, its an oversized iPod Touch. Come on Apple, how hard is it to make one of these!? Sure, computers and iPods can do more or less the same job, but the masses would undoubtedly eat this up.

DeliveryWe’re seeing a number of trends in technology that give a very strong indication of how we’ll be getting our music. Firstly, mp3 players, phones and cameras are gradually converging into one super device. These devices will become increasingly integrated with the internet and our home computers. Secondly, information is gradually being moved into ‘the cloud’. This means people are storing their documents and preferences online, so they can access them from anywhere.

Going on these two trends, I expect to see our music collections becoming more web-based. When we buy music, from home or abroad, it gets added to this centralised collection, and all our devices will synchronise with it. Not only does it make our music easily accessible, but it’s a natural evolution of collections into the digital world. One of the most rewarding parts of buying records or CDs is that you gradually build a collection that you can be proud of. As our music becomes digital, so will our collections. And it will be online social networks that replace our bedrooms as the place where we share and display our musical history.

RecommendationsWhenever I try and analyse what could improve the performance of online music stores, I usually focus on two key groups: illegal downloaders and audiophiles. There are plenty of other poorly performing groups (single mothers perhaps?), but these are the two I understand. In order to engage these groups, the focus really needs to be on the things I mentioned earlier, quality and flexibility.

Quality needs to match that of a CD. This means high quality downloads, associated content (album art, liner notes, etc.) and some sort of token, to make your purchase feel worthwhile. This token is referring to the sharable, online collections that I mentioned earlier, where you get something to show for your moeny, not just a bunch of mp3s that get lost amongst all your illegal downloads.

Flexibility mostly needs to focus on choice and ease of use. As I mentioned earlier, you should be able to download in whatever format you want and continue to have access to any format. Think of it like buying a CD that gets minded for you online. When you want to download, you choose your settings and rip it. You can even listen online or rip it again if you wish.

If you can offer both quality and flexibility, you’re bringing legal downloads to a level above CDs and illegal downloads and making them worth paying for. As it stands, they are only equal to or worse than the other options, so its no wonder they’re unpopular.

The other area which I feel is integral to the success of digital music is integration. Buying music online needs to be so ridiculously easy that we do it out convenience, even if there is free alternatives available. Take Nintendo's Virtual Console for example. This system allows you to download classic games onto your Wii and play them on your TV. It has been very successful, despite the fact that every one of these games can be played on a computer for free with an emulator. The reason people pay is that its so convenient and nicely integrated into their home entertainment systems. For music, this means integrating the buying process into all the areas that we're listening (our stereos, on the web, on our phones), so that when we want something new, we'll take the convenient option, not the free option. iTunes does a pretty impressive job, but thats only if you're willing to lock into Apple's products. We're still waiting on someone to produce a product that seemlessly ties in all our listening experiences and makes buying online music second nature.

89 comments:

* Logitech Squeezebox: http://www.slimdevices.com/pi_duet.html ... I own one and it is FANTASTIC. it has a remote with an interface not unlike an iPod, also supports control via web browser, iPhone, you name it... really cheap too!

* Sonos: http://www.sonos.com/Default.aspx?rdr=true&LangType=1033 ... designed more for multi-room setups.

ah yes I have heard of the squeezebox now that you mention it. damn it looks cool!

but what I have in mind is slightly different .it would have its own hard drive and speakers, so it could act as a stand alone unit (possibly even with a radio and cd player built in, to replace an existing stereo). also it would have its own, large touch screen interface which you could walk up to, flick through your collection (think cover flow), and tap to get some music playing.

i must admit though, the web/remote/iphone interface of the squeezebox is pretty clever. thanks for the tip. now i need one!

real interesting post...on the music discovery front, another new service you might want to check out is our Music Patterns ; it provides customized playlists based on music that 'People Like You' actually listen to.

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Disclaimer

Music is featured here in the hope that people will discover, and thus support, artists they otherwise would not have found. If however you represent an artist whose song is featured here and would like it removed, a kind word is all it takes for it to disappear.